After retail inflation surged to a 15 month high of 4.88% in November, much higher than RBi’s medium-term target of 4%, a rate-cut by the central bank in early 2018 looks highly unlikely. In its bi-monthly policy review held last week, the RBI kept key policy rates unchanged, as the central bank’s concerns over inflation rising through the year seem to be coming true. Notably, RBI has raised its expected inflation estimate on the entire band by ten basis points to 4.3%-4.7% in Q3 and Q4 from 4.2% to 4.6% earlier.Food inflation doubled to 4.41% in November from 2.26% in October and the price rise was reflected in almost all categories except pulses, prices of which continued to fall. Apart from food inflation, fuel prices increased for the sixth month in a row, rising 7.92% in November. “Crude oil prices touched a two-and-a-half-year high in early November on account of the Organisation of the Petroleum Exporting Countries’ (OPEC) efforts to rebalance the market,” RBI observed in its report.The rising inflation has put further pressure on the apex bank, as experts say that that such a hawkish stance may inhibit growth. After the six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the repo rate unchanged at 6%, global research firm Credit Suisse said that the bar continues to be high for rate cuts, adding that growth disappointment may warrant one. Global rating agency Fitch had recently said that the central bank had headroom to “keep the policy rate low” to enable a pick-up in the economy, which grew “weaker than expected” in the second quarter.However, now experts and analysts point out that a rate cut seems to be far away. “Jump in November inflation surpassed even our above consensus forecast, testing past the 4% target for the first time in over a year. This also breaches the RBI’s December revised estimates. Firm inflation and concerns over generalised pressures has shut the door on rate cuts. The jump in November inflation reinforces our view that RBI is settling into a long pause. Further increases in inflation and a narrower output gap might prod them to shift to a tightening bias next year,” By Radhika Rao, India Economist, DBS Bank said yesterday.“The RBI had already warned about the sharp increase in inflation in its monetary policy in the aftermath of the higher HRA payable to government employees. The real surge in inflation came in rural inflation which sharply moved up from 3.36% to 4.79%. This is likely to force the MPC to put off rate cuts for the time being,” Jaikishan J Parmar, Research Analyst, Angel Broking said in a statement adding, “The combination of higher inflation and flat growth almost rules out any rate cut by the RBI in the next couple of monetary policies.”